WEBVTT 00:00:00.080 --> 00:00:01.997 Microsoft has a new version of its 00:00:02.080 --> 00:00:05.197 co-pilot AI assistant that merges the 00:00:05.280 --> 00:00:09.197 consumer and workplace versions into one product that's just aimed at corporate 00:00:09.280 --> 00:00:13.117 customers. It's an interesting week as we talked about uh with MetaMuse coming 00:00:13.200 --> 00:00:15.677 out for this also news to drop. Joining 00:00:15.760 --> 00:00:17.677 us for more Dedra Bosa she's bringing a 00:00:17.760 --> 00:00:22.797 new show to Yahoo Finance and just spoke to Microsoft CEO Satcha Nadella and 00:00:22.880 --> 00:00:25.117 she's joining us now. Hey D, good morning. 00:00:25.200 --> 00:00:28.557 >> Hey guys. Well, first of all, I'm thrilled to be here. my first appearance 00:00:28.640 --> 00:00:33.117 on Yahoo Finance, but of course longtime watcher and listeners. So, I was up in 00:00:33.200 --> 00:00:37.277 Redwood, Seattle earlier this week talking to Sati Nadella and the 00:00:37.360 --> 00:00:41.197 Microsoft team and I got a preview of this new co-pilot and Microsoft had to 00:00:41.280 --> 00:00:42.397 do something special here, right? 00:00:42.480 --> 00:00:45.917 Because even though Sati Nadella says that the adoption numbers, it's about 30 00:00:46.000 --> 00:00:49.437 million customers so far, he's happy with that. They really want to be the 00:00:49.520 --> 00:00:52.237 operating layer for enterprise AI. So, 00:00:52.320 --> 00:00:54.637 this new co-pilot has a few different 00:00:54.720 --> 00:00:57.757 modes. And the bet is essentially that 00:00:57.840 --> 00:01:01.997 companies shouldn't have to watch the model race, right? It moves too quickly. 00:01:02.080 --> 00:01:05.517 Even for someone like me that's living here in San Francisco, every week 00:01:05.600 --> 00:01:08.317 there's another model that's on top and you got to switch and figure out what 00:01:08.400 --> 00:01:12.957 that is. Microsoft is betting, you know, just come to us, come to Copilot. We'll 00:01:13.040 --> 00:01:16.397 figure it out for you. We have access to all of the models and we'll serve you 00:01:16.480 --> 00:01:20.637 the right one for your task. So hard model for a hard task, you know, more 00:01:20.720 --> 00:01:25.917 capable, cheaper model for an easier task. The new co-pilot has three modes. 00:01:26.000 --> 00:01:29.037 Chat, which is like your typical chatbot, code, which is kind of like a 00:01:29.120 --> 00:01:33.357 co-working where you can vibe code and do other kinds of coding. And then 00:01:33.440 --> 00:01:37.837 autopilot, which I really think stole the show in terms of this new co-pilot. 00:01:37.920 --> 00:01:42.317 I'm calling it kind of like Muse for business because it's very intuitive. 00:01:42.400 --> 00:01:44.237 that's already connected to all of your 00:01:44.320 --> 00:01:47.437 apps, all of your email, all of your 00:01:47.520 --> 00:01:51.917 workflows. It kind of just works like a personal assistant on your behalf. So, I 00:01:52.000 --> 00:01:55.197 asked Ache Nadella about this, kind of told him that I thought it stole the 00:01:55.280 --> 00:01:57.197 show. Here's how he described it. 00:01:57.280 --> 00:01:59.197 >> Think about it, right? We launched uh in 00:01:59.280 --> 00:02:02.157 fact co-pilot task um just around the 00:02:02.240 --> 00:02:04.397 same time as open clock came out and we 00:02:04.480 --> 00:02:08.077 saw a ton of activity uh in the consumer 00:02:08.160 --> 00:02:11.117 space. uh but you know autopilots are 00:02:11.200 --> 00:02:14.237 fantastic until you have to do something 00:02:14.320 --> 00:02:16.877 with the output of an autopilot. So this 00:02:16.960 --> 00:02:21.757 is where I don't think of any one form factor as the be all end all right this 00:02:21.840 --> 00:02:25.197 is where like I'll give you another example right even with co-work and 00:02:25.280 --> 00:02:28.477 excel right coowork can create fantastic 00:02:28.560 --> 00:02:31.357 spreadsheets but at some point I want to 00:02:31.440 --> 00:02:33.277 reason and that's the so there's an 00:02:33.360 --> 00:02:36.317 outer loop uh that's kind of co-work 00:02:36.400 --> 00:02:40.717 inner loop is the agent loop inside of Excel same thing with autopilot I think 00:02:40.800 --> 00:02:45.277 of autopilot as something that has an identity it does complete jobs but then 00:02:45.360 --> 00:02:47.517 when it hands off or when I am trying to 00:02:47.600 --> 00:02:52.397 instruct it, I need my co-pilot uh and my cowork and so this is where I don't 00:02:52.480 --> 00:02:54.237 think of this as any one thing but it's 00:02:54.320 --> 00:02:57.277 the composition but to your point having 00:02:57.360 --> 00:03:00.717 autopilot is about that next generation 00:03:00.800 --> 00:03:03.597 of I would say automation uh in the 00:03:03.680 --> 00:03:07.837 enterprise that I think is going to have very high ROI for uh businesses adopting 00:03:07.920 --> 00:03:12.637 it. So this autopilot mode which I think a lot of enterprises are going to be 00:03:12.720 --> 00:03:16.477 interested in that rules out on the coming weeks and sort of asked Nadella 00:03:16.560 --> 00:03:20.397 you know why not give this to people sooner right away since you know it 00:03:20.480 --> 00:03:23.757 looks useful and people are getting used to sort of these consumer habits having 00:03:23.840 --> 00:03:27.357 an agent with Muse and Instinct and others. Um I heard your guys 00:03:27.440 --> 00:03:29.277 conversation just before I came on. You 00:03:29.360 --> 00:03:31.517 were talking about Muse and how you 00:03:31.600 --> 00:03:34.877 needed to trust a corporation to 00:03:34.960 --> 00:03:38.557 actually hand over all of your data and that is something that Microsoft is 00:03:38.640 --> 00:03:40.637 absolutely thinking about really part of 00:03:40.720 --> 00:03:43.517 its core you know mission is to make 00:03:43.600 --> 00:03:48.237 sure that the trust the permissions the security is in place here's what Nadella 00:03:48.320 --> 00:03:52.557 had to say about that >> trust is going to be the maximum biggest 00:03:52.640 --> 00:03:56.797 issue for us in fact it's you're going to hit that on the consumer side uh in 00:03:56.880 --> 00:03:59.677 fact if I look back at even our experience experience in the consumer 00:03:59.760 --> 00:04:02.957 space. That is it, right? Okay. Can I really trust it with all of my 00:04:03.040 --> 00:04:05.117 credentials when it does autonomous 00:04:05.200 --> 00:04:07.917 activity? Uh how do I make sure that 00:04:08.000 --> 00:04:12.637 this is something that I can feel that I'm in control? I can audit. And in the 00:04:12.720 --> 00:04:16.077 enterprise, this is everything. That's why when you even think about copilot, 00:04:16.160 --> 00:04:19.517 we don't think about it in in an isolation like any form factor like 00:04:19.600 --> 00:04:23.197 autopilot. Agent 365 is probably the most important. You know, it's the 00:04:23.280 --> 00:04:26.957 product that is getting the fastest adoption in the enterprise. that ability 00:04:27.040 --> 00:04:28.957 to observe everything, govern 00:04:29.040 --> 00:04:34.077 everything, set policy, have security, have the phops. By the way, the other 00:04:34.160 --> 00:04:35.757 thing that you'll notice is that this 00:04:35.840 --> 00:04:38.557 thing once the subsidies stop for 00:04:38.640 --> 00:04:41.117 everybody, uh, this is going to there's 00:04:41.200 --> 00:04:45.597 marginal cost to tokens. And so one of the core business model realizations is 00:04:45.680 --> 00:04:47.677 that this is there's a certain amount of 00:04:47.760 --> 00:04:49.837 subsidy anyone can do but at the end of 00:04:49.920 --> 00:04:54.877 the day uh this all has to be about the return that the user gets whether it's 00:04:54.960 --> 00:04:58.077 in the consumer space or in the enterprise space. 00:04:58.160 --> 00:05:00.877 >> So I thought that was one of the most interesting parts of the interview. He 00:05:00.960 --> 00:05:04.877 says when the subsidies stop and that's part of the reason that they're not just 00:05:04.960 --> 00:05:07.197 rolling autopilot out immediately to 00:05:07.280 --> 00:05:12.317 everyone because of course requires tokens requires compute can be expensive 00:05:12.400 --> 00:05:15.597 and Sachi Nadella at the end he says we got to make sure that our customers have 00:05:15.680 --> 00:05:18.797 ROI their return on investment um and 00:05:18.880 --> 00:05:23.197 Nadella's always been one of these CEOs that has to create value I mean of 00:05:23.280 --> 00:05:26.637 course they all do but for the enterprise so it was just interesting to 00:05:26.720 --> 00:05:29.837 hear him speak so candidly like that and 00:05:29.920 --> 00:05:33.837 I'm sure you as co-pilot the new one rolls out um we'll hear from different 00:05:33.920 --> 00:05:36.797 companies will it be enough to take them 00:05:36.880 --> 00:05:39.837 away from you know an anthropic or open 00:05:39.920 --> 00:05:41.917 AI contract I mean that is the real 00:05:42.000 --> 00:05:46.877 question the battle in AI over enterprise is extremely fierce and it's 00:05:46.960 --> 00:05:49.997 extremely lucrative >> and you're proious you know China top of 00:05:50.080 --> 00:05:52.877 mind obviously with regards to AI and things like that you trade talks going 00:05:52.960 --> 00:05:56.717 on you had the big state dinner with Nadella in attendance I believe so did 00:05:56.800 --> 00:06:00.957 he have anything to say about sort of AI and proliferation with China. 00:06:01.040 --> 00:06:03.837 >> Yeah. And you know it's a huge topic here especially as we're talking about 00:06:03.920 --> 00:06:07.517 safety and alignment and if the US AI 00:06:07.600 --> 00:06:11.917 industry slows down is China going to do that with Xiinping coming over here this 00:06:12.000 --> 00:06:16.237 week. Um you know questions is there room for them to agree on sort of some 00:06:16.320 --> 00:06:20.557 basic stuff. So certainly did talk to Nadella about that and you know he was 00:06:20.640 --> 00:06:22.957 optimistic. I asked him you know what 00:06:23.040 --> 00:06:25.037 needs to happen and he thinks that it's 00:06:25.120 --> 00:06:27.837 in both countries interest to get on the 00:06:27.920 --> 00:06:32.077 same page at least when it comes to notification. So if there is a cyber 00:06:32.160 --> 00:06:35.917 security attack, there is sort of a direct line from president to president 00:06:36.000 --> 00:06:39.677 to say this is what's happening similar to what happens in the military right 00:06:39.760 --> 00:06:43.677 because AI is that powerful. Uh have a listen to what he said. 00:06:43.760 --> 00:06:47.997 >> I would sort of encourage uh the US and China because I think both sides will 00:06:48.080 --> 00:06:50.957 care about the same set of things at the end of the day which is they want to be 00:06:51.040 --> 00:06:55.677 able to have this technology actually help their citizens get value. Uh so 00:06:55.760 --> 00:06:59.917 diffusion is sort of one thing that both sides will care about and then to be 00:07:00.000 --> 00:07:03.917 able to do that safely uh is also going to be important to both sides. So the 00:07:04.000 --> 00:07:06.397 more there are norms that they set uh 00:07:06.480 --> 00:07:09.277 and the US in particular can lead uh the 00:07:09.360 --> 00:07:13.997 better off we are as a world. >> So here I'll be a little bit skeptical. 00:07:14.080 --> 00:07:15.517 Well, I mean, we're a long way from 00:07:15.600 --> 00:07:18.797 actions and I think a set of norms, but 00:07:18.880 --> 00:07:23.757 if we get sort of notifications, a direct line of communication out of the 00:07:23.840 --> 00:07:27.837 US China summit this week, that's positive. You guys saw how many of 00:07:27.920 --> 00:07:31.757 American business leaders and politicians and important people were in 00:07:31.840 --> 00:07:33.517 the room at last night's state dinner. 00:07:33.600 --> 00:07:37.197 Nadella was there. So some progress um 00:07:37.280 --> 00:07:39.277 and Nadella seemed you know fairly 00:07:39.360 --> 00:07:42.397 optimistic certainly that incentives on 00:07:42.480 --> 00:07:46.477 alignment and safety um would be sort of similar for both countries and there 00:07:46.560 --> 00:07:48.637 would be at least some takeaways. 00:07:48.720 --> 00:07:51.837 >> Dearra we've seen a growing trend of states starting to really look at 00:07:51.920 --> 00:07:53.837 regulation of the data center buildout. 00:07:53.920 --> 00:07:56.957 You look at the one-year moratorium we have in New York on hypers scale data 00:07:57.040 --> 00:08:01.837 centers. You look at the uh pipeline audit project audits we see in Texas 00:08:01.920 --> 00:08:05.357 under Greg Abbott. And then setting aside the governments, you just have 00:08:05.440 --> 00:08:08.797 kind of the plain push back from the everyday American who says, "I don't 00:08:08.880 --> 00:08:12.637 want this data center in my backyard. I don't want my power bills to go up. I 00:08:12.720 --> 00:08:16.157 don't want my water bill to go up. I don't want the lights." What's your 00:08:16.240 --> 00:08:19.757 sense of how Satia and Nadella is thinking about that and what how that 00:08:19.840 --> 00:08:24.397 might impact Microsoft's plans as they look to fund this build out and push 00:08:24.480 --> 00:08:27.917 themselves forward? You know, I don't remember the gap ever 00:08:28.000 --> 00:08:31.117 being larger between how the technology 00:08:31.200 --> 00:08:35.677 industry feels about something this big, the data center buildout that is going 00:08:35.760 --> 00:08:39.197 to be the backbone that is going to power the AI revolution and how sort of 00:08:39.280 --> 00:08:43.037 the average American feels. So, when I asked Nadella about this, he kind of 00:08:43.120 --> 00:08:47.357 gave me the answer that you hear from a lot of the big tech CEOs. you know, 00:08:47.440 --> 00:08:50.717 we're providing benefits. We're investing back in the communities. But 00:08:50.800 --> 00:08:54.557 something that Microsoft is doing differently, and I, you know, I gave him 00:08:54.640 --> 00:08:56.557 credit for this, they sort of backed 00:08:56.640 --> 00:08:58.877 away from the NDA, the non-disclosure 00:08:58.960 --> 00:09:03.997 agreement that tech has really had in place when they build these data centers 00:09:04.080 --> 00:09:08.637 and build in different communities. And I asked him, has that been effective? 00:09:08.720 --> 00:09:11.677 And he says, and will it be the industry norm? Right? That's what I was curious 00:09:11.760 --> 00:09:14.157 about. will Google will um the other 00:09:14.240 --> 00:09:18.957 hyperscalers will Amazon have to follow and you know be more transparent which 00:09:19.040 --> 00:09:23.357 is what the communities want and you said he thought so. So Microsoft is you 00:09:23.440 --> 00:09:28.077 know in my opinion kind of leading the way on this. Will it be enough? That is 00:09:28.160 --> 00:09:32.237 another question because you guys know very well that this is just such a 00:09:32.320 --> 00:09:36.477 polarizing issue such a hot button issue for the communities where these are 00:09:36.560 --> 00:09:38.397 being built. >> Yeah. I mean the NDA it seems like the 00:09:38.480 --> 00:09:42.237 NDAs aren't really an option anymore because the communities will not allow 00:09:42.320 --> 00:09:46.077 it effectively because there's been such opposition. 00:09:46.160 --> 00:09:49.837 >> Yeah. And you know something that he talked about and you know Dina Pal 00:09:49.920 --> 00:09:53.437 McCormack at Meta has talked about and the others as well is really you know 00:09:53.520 --> 00:09:55.677 can giving back to these communities 00:09:55.760 --> 00:09:57.757 building hospitals building schools 00:09:57.840 --> 00:10:01.197 putting money into them. Um it sounds 00:10:01.280 --> 00:10:04.157 sounds great in practice. Um but you 00:10:04.240 --> 00:10:08.397 know these t these things take time. you have a buildout, you have, you know, 00:10:08.480 --> 00:10:11.117 sound in some cases that affect the 00:10:11.200 --> 00:10:12.557 community. So, these are really real 00:10:12.640 --> 00:10:16.157 issues and I think that tech as a whole, 00:10:16.240 --> 00:10:18.717 the hyperscalers, the neoclouds, they're 00:10:18.800 --> 00:10:21.437 having to think about this in new ways 00:10:21.520 --> 00:10:23.197 because I'm not sure that anyone 00:10:23.280 --> 00:10:26.477 predicted just how controversial this 00:10:26.560 --> 00:10:29.037 would be a few years ago. But to be able 00:10:29.120 --> 00:10:32.557 to, you know, build more gigawatts of 00:10:32.640 --> 00:10:35.597 data of compute in America, they have to 00:10:35.680 --> 00:10:40.080 figure this piece out. It's absolutely essential.